West Warwick downgraded once again

WEST WARWICK — Days before the town financial meeting — being held tonight —Moody’s Investors Services reviewed West Warwick’s rating and once again, downgraded it from BBB+ to BBB-.

This rating leaves the town one step above junk bond status.

The rating was based on $12 million in outstanding general obligation (GO) bonds that the town has accumulated.

These bonds, according to a report sent out by Moody’s, have been placed on a rating watch negative.

One of the key drivers in the two-notch downgrade is the growing budget problems the town has seen in the past year in regards to its unfunded pension plan and Other Post Employment Benefits (OPEB).

The Moody’s report states that “the city’s budget pressures are compounded by consistent underfunding of retiree costs, statutory revenue limitations, a shortage of additional cost cutting solutions, financial exposure to school budget underperformance and a town charter requirement for budget approval by referendum.”

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